Patent Term Adjustment Is Coming to Canada but Very Few Patents Will Qualify

As explained in our previous article, in order to comply with Canada’s obligations under the Canada-United States-Mexico Agreement (“CUSMA”), Canada agreed to implement a patent term adjustment (“PTA”) framework to compensate patentees for unreasonable delays by the Canadian Patent Office (“Patent Office”) in the granting of their patents. The necessary amendments to the Patent Act were enacted in 2023 and the proposed amendments to the Patent Rules implementing the PTA framework were published for a public consultation on May 18, 2024, which consultation ended on July 4, 2024. Canada must implement the PTA framework no later than January 1, 2025, and it will apply to all Canadian patent applications filed on or after December 1, 2020.

Although final details of the new PTA framework will only be known once the amendments to the Patent Rules are published in their final form, the expectation is that the proposed framework will come into force without substantive amendment.

Timing and Cost

In order for a patent to be considered for a PTA, the patentee must submit a request with the applicable fee (C$2,500 for standard entities) within three months of the patent grant date.

Eligibility

For a patent to be eligible for a PTA, the patent must be granted after the later of:

• Five years from the date of national phase entry (for a PCT application), the date of presentation (for a divisional application) or the date of filing (for a regular application), and
• Three years from the date the Request for Examination was made.

Duration

The PTA term will be calculated from a start date, which is the later of the two dates listed above, to the patent grant date, minus “days to be subtracted” which will be defined in the amended Patent Rules. The proposed framework practically excludes almost every day under the Patent Act and Patent Rules on which an applicant could have (but did not) take action during prosecution, resulting in 38 different categories of “days to be subtracted,” the following of which are of particular practical importance and will be deducted from any accrued PTA:

(i)     Each day that a Request for Examination is deferred.

(ii)    All days starting from the date of an Examiner’s Requisition and ending on the date that the applicant files a response.

(iii)  All days starting from the date of a Notice of Allowance and ending on the date that the applicant pays the final fee.

(iv)  All days starting from the date the applicant files a first Request for Continued Examination (“RCE”) and ending on the date that the final fee is paid.

(v)   All days of extension granted by the Patent Office.

(vi)  All days a patent application is in abandonment.

Determination

Following the filing of an application for PTA, the Patent Office will issue a notice with a preliminary determination of the duration of the PTA. The patentee and any other person may submit observations regarding the preliminary determination within two months of the notice. The Patent Office will then issue a certificate of PTA or dismiss the application, providing reasons for the determination.

Maintenance

To maintain the rights accorded by the PTA, annual maintenance fees (C$1000 for standard entities) are required to be paid on the anniversary of the patent filing date to maintain the patent in force during the additional PTA term.

Special Considerations for Medicines

The period of PTA will run concurrently with any patent term extension granted under Canada's Certificate of Supplementary Protection (CSP) regime, which regime accounts for delays in the regulatory approval process for medicines.

If a PTA is granted in respect of a patent that is listed on the Patent Register under the Patented Medicines (Notice of Compliance Regulations or NOC Regulations), the federal Minister of Health must be informed of the adjusted expiry date.

Likewise, if a PTA is granted in respect of a patent that is subject to the Patented Medicines Regulations, within 30 days, the adjusted expiry date must be reported to the Patented Medicines Prices Review Board (“PMPRB”) and the PMPRB’s jurisdiction over pricing will apply to the adjusted term.

Practical Considerations

Despite the intention of the PTA framework to adjust the term of a patent for "unreasonable" delays in prosecuting a patent application, very few patents are likely to qualify for any PTA once the proposed framework is implemented. This is because, under the current Client Service Standards for Patents, the Patent Office should require less than about 40 months to examine a patent application and grant the patent once the final fee is paid. However, under the proposed PTA framework, the Patent Office will always have at least a minimum of 60 months from the filing date to grant the patent once the final fee has been paid, which provides a cushion of about 20 months before a PTA can even be considered. By deducting every single day that falls to the applicant to respond to the Patent Office and completely excluding from consideration any period of time that occurs after the filing of an RCE, the proposed framework will effectively exclude most patents from being eligible for a PTA, except for in the rarest of situations where there is truly an extraordinary delay by the Patent Office.

Deferring the Request for Examination of a Canadian patent application has several advantages, including the use of advanced examination under the Patent Prosecution Highway based on the positive outcome of foreign patent prosecution. Because the granting of a PTA under the proposed PTA framework will be rare, applicants may not be well-served by adopting quicker prosecution strategies of patent applications on the off chance that they will be eligible for a PTA. Ultimately, applicants will have to balance the potential advantage of an unlikely PTA against the tried-and-true advantages of deferring prosecution of Canadian patent applications while foreign prosecution proceeds.

The Patent & Industrial Designs Group at Aird & McBurney LP assists clients in acquiring the appropriate IP rights to support their business mandates. Please contact the author or a member of the group if you have questions or require assistance.